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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 46541
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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After filing a Complaint , sellers attorney released funds

Customer Question

After filing a Complaint , seller's attorney released funds held in escrow (down payment on real estate transaction) to my attorney. My attorney is now refusing to release the funds until payment of an additional fee for work to revise the Complaint before it was filed (initial retainer funds were provided). The revisions were needed to correct errors and omissions that I noted after reading the drafts and providing comments (attorney's errors) (incorrect dates, omission of a key detail, numerous grammar/spelling errors, filing in incorrect county).
Can attorney hold all the funds, or only the amount in dispute?
Is it reasonable for attorney to charge for revisions of work - when revisions were needed to correct his errors/omissions?
Submitted: 12 months ago.
Category: Real Estate Law
Expert:  Richard replied 12 months ago.
Hi! My name is XXXXX XXXXX I look forward to helping you!

Your lawyer is not acting within the bounds of the canons of ethics. Your deposit is totally separate and distinct from any billing issues he may have with you. Until and unless he were to sue you and obtain a judgment against you, he has no legal right to retain any portion of your deposit. Furthermore, given your facts, his incompetence caused the need for the additional services, so it's not likely he would prevail in any suit. What you want to do is raise the stakes on him so that he knows that not complying with your demands is going to cost him far more in the end than simply releasing your deposit now. You should send him a certified, return receipt requested letter detailing the history and demanding he release your earnest money in total within a short specified period of time. Inform him that if he does not timely comply with your demand, you will have no choice but to: i) file a formal ethics complaint with the state bar association, and ii) file a suit against him for your damages. Be sure to specifically mention that you will be filing this claim not only as a breach of contract case, but also as deceptive trade practice, legal malpractice and bad faith actions, which will entitle you not only to your actual damages, but also an additional amount equal to multiple times your actual damages as punitive damages. That should provide plenty of incentive to comply with your demands; but, if it does not, file your ethics complaint and your suit.



Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). I thank you in advance for taking the time to provide me a positive rating!
Customer: replied 12 months ago.

Richard


Thanks for your response....to clarify, since the funds in question are funds being returned to me - from the seller's attorney who held the funds in escrow - by sending the funds to my attorney (he cashed the check) - my attorney does not have the right to put a retaining or charging lien on the funds now in his possession? The funds were "returned" as a result of agreement to dismiss a Complaint filed against the seller - is this considered "settlement" funds? This situation is in NYC.

Expert:  Richard replied 12 months ago.
Thanks for your quick reply. He does not have a right to put any kind of lien on these funds...these are your funds that are simply being released to you. These are not damages of any sort. It would be a huge stretch for these to be considered "settlement funds." Furthermore, his incompetence led to any additional charges, so his claim to additional fees is suspect at best! Let him know he must immediately release your deposit; then, if he chooses to want to arbitrate whether or not you owe him for any additional charges, you're fine with that, but that should he choose to pursue this, he should know you will be fully contesting his right to any additional fees due to the fact his negligence led to them being incurred. I noticed you were in NY so I provided you information applicable to NY. Although I'm in Texas, I have two sons in the financial industry...investment banking and private equity....in NYC, and so am quite familiar with your situation in NY having been called upon frequently to investigate legal issues for the two of them and their friends. :)
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 46541
Experience: 32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
Richard and 2 other Real Estate Law Specialists are ready to help you
Expert:  Richard replied 12 months ago.
Thank you so much for the positive rating! I truly appreciate you taking the time to do that!
Customer: replied 11 months ago.
The lawyer returned the escrow funds, and cut the fee for the revisions in half. That's the good news, however, he then altered the final bill....added in a fee that he had originally "waived" , so the new final bill is larger. The original bill had the costs netted from the escrow funds with a sum total due back to my daughter. Since he has now returned the escrow funds, the new outstanding bill is larger then the amount that would have been netted against the escrow funds. Is this legal....can he change the amount due....charging for what was initially indicated to be waived...in fact 2 different amounts were quoted as waived amounts....see excerpts below from email correspondence.

In an email he indicated that he had waived a fee....first note from the paralegal: I am preparing the check today for Noel’s signature. In connection with this matter, I am attaching our bill for the legal services and expenses incurred. Noel has asked me to waive the balance of $940.0.00 in time charges and has not charged you for any additional time to prepare and finalize the settlement. We will be deducting from the refund check the expenses related to your case in the amount of $1,006.30. The invoice is attached for your records." This is from Noel after my daughter questioned why she was being charged for the 3 revisions... "I am not prepared to reduce my invoice any further. Keep in mind that I have not charged you at least $1100 for time I spent on your matter."
Expert:  Richard replied 11 months ago.
Good morning. I would not accept anything the lawyer is proposing that is not agreeable to you. The lawyer has no right to attach any of your funds and his incompetence led to a great many of the charges. Furthermore, he cannot not reinstitute fees he previously waived. So, until he's willing to come to terms acceptable to you, let him know if you don't receive all your funds, you will be filing the ethics complaint and the malpractice suit.
Customer: replied 11 months ago.
My daughter is willing to meet half way....pay half the fee for the revisions, but not for the waived fees. Since it was stated twice, once by the legal assistant and the second time by the attorney himself that fees were waived (although different amounts stated), can my daughter state that changing the bill to add the additional fees is not legal since an itemized bill had already been issued? Can the attorney do so because my daughter had not accepted his original bill because he was netting out expenses against the escrow - therefore could he argue that the bill had not been finalized and therefore, still open to including additional expenses?
Expert:  Richard replied 11 months ago.
Thanks for following up! I understand what he's trying to do, but he's simply going to have trouble getting any court to buy his argument in my view. He's basically trying to re-institute fees that were waived to collect additional billings he would otherwise not be able to justify. I would hold your ground. You have the better side of this and he's got everything to lose.
Customer: replied 11 months ago.
My daughter received her escrow funds on Saturday and is depositing the check today. She has also received the bill which includes the waived fees and has 30 days to pay or incur interest and possible collection suit. So at this point she can continue to argue the bill, but at some point would have to file for arbitration ( which could cost her more fees?). Would fees that were not originally included be added in at such a hearing.....could more fees be added on if the attorney magically finds more reasons to charge fees (once he "closely reviews" all the events of the original legal matter). Can she be opening a can of worms so to speak. Or does the original bill really contrain the attorney from continuing to alter the bill? Shouldn't the expenses listed on the original bill be the only fees that can now be charged - not have the option to add in fees that were previously waived.

Sorry for asking the question in different ways....want to make sure my daughter is on solid ground and has the right wording in presenting her argument to the attorney....
Expert:  Richard replied 11 months ago.
No worries...I'm here to help! What the lawyer should be doing is to put his shovel down rather than continuing to dig his hole deeper. All these actions by the lawyer are not going to look good in any ethics complaint or collections suit. He cannot retroactively go back and "rearrange" fees and expenses that were not originally included.
Customer: replied 11 months ago.
Thanks Richard....I will work with my daughter to get this message through so we can put an end to this.
Expert:  Richard replied 11 months ago.
You're welcome...I'm happy to help! Have a great week!
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 46541
Experience: 32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
Richard and 2 other Real Estate Law Specialists are ready to help you
Expert:  Richard replied 11 months ago.
Thanks again for the excellent rating! I truly appreciate that!

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